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Former Chrysler execs file class-action suit over pension losses

More than 450 executives from Chrysler's white collar force, going all the way back to Lee Iacocca, have sued Daimler and Cerberus for gutting the value of their collective supplemental pensions to the tune of $100 million. The class action suit took the noted step of not suing Fiat-owned Chrysler, with the lead attorney saying that "Everybody involved in this suit loves that company and like everybody else wants to see it succeed."
Plaintiffs accuse Daimler and Cerberus of not adequately protecting the supplemental pensions from creditors as Chrysler's health slid from trouble to terminal. Those pensions weren't moved to the new Chrysler, and now the former execs are paying the price. Follow the jump for a press release from the lead firm handling the case.

Former Chrysler/DaimlerChrysler Executives File Claim for Lost Pensions

DETROIT, Sept. 10 /PRNewswire/ -- A group of over 450 former employees and managers from Chrysler and DaimlerChrysler today filed a class action claim in Wayne County Circuit Court against Daimler and Cerberus to regain their supplemental pensions that were lost during Chrysler's reorganization and bankruptcy last year. The guaranteed pensions were not transferred to the new Chrysler during those proceedings and, as a result, each of the plaintiffs lost large percentages of their earned retirement pensions.

Attorneys Sheldon L. Miller of Farmington Hills and Mayer Morganroth of Birmingham are the lead attorneys representing the plaintiffs in the case.

"The Chrysler bankruptcy was devastating to virtually everyone involved," said Miller. "Many of the men and women participating in this lawsuit worked their entire lives at the company under the repeated promise that these pensions would be there and intact for their retirement years. The direct financial loss, in combination with the serious reduction in medical, health care and auto benefits resulting from the bankruptcy, is causing them to make drastic changes to their retirement plans at a time when they can't go out and find other jobs to supplement their incomes. These are good, hard working people who are being severely punished through absolutely no fault of their own."

Miller said there are no plans for any action against the new Chrysler. "Everybody involved in this suit loves that company and like everybody else wants to see it succeed," Miller said. "The plaintiffs in our case are trying to assure that there won't be similar hardships for Chrysler's current employees, many of whom worked for and with the people involved in this suit. Nobody wants to hurt them or the new company's chances for success."

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Anonymous

4 Years Ago

The $100 million is probably not split evenly. Higher end execs will probably end up getting much larger amounts but the lower execs would end up getting something like $80K to retire on. Which is horrible because nobody can afford to live for 30 years on $80K. Even $200K is not really money you want to retire on because you have to live for decades on this.

Anonymous

Anonymous

4 Years Ago

Even if you divide it evenly it's not really enough money to retire with at all. If you were 70 and you basically depended on your pension you'd be screwed. Also, these things are never divided evenly, it's more likely that someone like Iacocca would get a huge cut while a lot of the lower level execs would get like 80K to retire on. Good luck living the next 2 decades on 2 grand a year lol.

Anonymous

4 Years Ago

Pure greed, and then people want to know what drives the unions to make the demands that they do. Try being a line worker, or a low level salaried worker who got screwed, and then look at these 450 crybabies complaining. Makes you ill.

Anonymous

Anonymous

4 Years Ago

Funny how their losses to a CHRYSLER-sponsored retirement plan to which they partook as a result of their employment with CHRYSLER, due to the decline of CHRYSLER through several generations of varying ownership, throughout which the common thread is...yes, CHRYSLER, holds Chrysler harmless in its suit.

Whether I agree Daimler/Cerebus are responsible, fine, name them in the suit and let the judge figure it out. Fiat, OK, I wouldn't necessarily name them since they came afterward.

But for these employees to hold what should be the primary defendant harmless (again, let the judge decide if they're liable) just because "we're old pals" makes it seems like they're just chewing on sour grapes, blame everybody else and not the decision-makers at the helm, and wanting to exact revenge.

Anonymous

At least the UAW was protected by Obama's unlawful bankruptcy of GM and Chrysler!! Now they're free to spend more of their member's dues on Anti-Romney ads in support of Obama, and if re-elected, Obama can maybe give them Ford next!!

Anonymous

Anonymous

4 Years Ago

Unless malfeasance or theft were the reason, it would be hard to win such a lawsuit. Daimler was the reason Chrysler fell, and the negligence of Cerberus is the reason they died. But ineptitude is hardly grounds. (though sometimes I wish it were)